HUL's new 'warehouse scheme' is wooing online sellers

The scheme is currently a pilot project with sellers on the online digital paymentsDigbijay Mishra | TNN | April 12, 2016, 17:03 IST

Image for representation only.Consumer products giant Hindustan Unilever Ltd (HUL) is renting out space in its New Delhi master warehouse to online sellers to stock their products at a subsidized rate. In return, the sellers will push HUL products on online marketplace platforms and the New Delhi warehouse will be used to deliver the products, multiple sources told TOI.

It is currently a pilot project with sellers on the online digital payments and commerce platform Paytm. If it is successful, Hindustan Unilever hopes to extend it to sellers on other marketplaces like Flipkart, Amazon and Snapdeal.

“This move will accelerate HUL sales on e-commerce portals and sellers will have a larger range of assortments ready to be dispatched,“ sources close to HUL's online business team said on condition that their names not be disclosed.

For companies at the scale of HUL, a big issue is to make the entire range of products available for consumers online as sellers often don't want to take the risk of stocking the full assortment. This project aims to cut down the supply chain complexities and operational costs for sellers, while connecting the consumer directly with the brand.

An email sent to an HUL spokesperson did not elicit any response till the time of going to print.

The Rs 30,806-crore HUL houses major personal care brands such as Fair & Lovely, Pond's, Dove and Sunsilk. A Paytm executive con firmed the development to TOI. “We started the pilot a few days back with HUL's wellness and beauty products range. The project tries to solve problems of sellers, consumers and a huge brand such as HUL,“ said Saurabh Vashishtha, vice president at Paytm.

Last year in February , Unilever CEO Paul Polman, during a visit to India, had said that the Indian e-commerce channel was an attractive proposition even though it was in the initial stages of development. Hindustan Unilever tied up with online grocer Big Basket last year. Hindustan Unilever's rival ITC is reportedly planning an exclusive supply chain for e-commerce.

Online marketplaces have been adding FMCG products on their platforms to lure more consumers. Since these are daily use products, they would increase frequency of consumer access of these platforms.

E-commerce firms typically get the majority of their revenues from electronics and appliances.